Cash Flow Tip 7 - Schedule-of-Values

Having a good Schedule-of-Values (SOV) and billing format will set you up for cash flow success throughout the project.

D. Brown Management Profile Picture
Share

Even the best project teams will have a difficult time overcoming a poorly set up SOV, so make sure that you invest the right amount of time in this process up front.  

Cash Flow: Tip 7 Schedule of Values (SOV) and Billing Formats
  • Develop a billing format that is easy to reconcile internally with changes and progress billings.  
  • Ensure that the billing format is easy to understand for the customer and easily integrates with their systems.  
  • Have the project schedule in-hand or at least know the basic flow of the project before developing your SOV.
  • Develop your SOV after you develop your budget and make sure they are integrated so your cash flow looks good based on the project schedule.  
  • Have a structured internal review process to ensure both good cash flow AND that you are not introducing other risks based on how the SOV is loaded.  
  • Looking at the map of your cash flow process in the project, sell the SOV to the appropriate people to ensure smooth progress billings. Use this as an opportunity to build relationships. 

Cash Flow Tip 7 - Schedule-of-Values
Great cash flow is a key driver of valuation and successful successions. Running out of cash is is the #1 reason contractors fail. Improving cash flow improves your Return on Equity. Protect yourself and never let cash flow be the limitation to your profitable growth....

Cash Flow Tip 7 - Schedule-of-Values
Great cash flow is a key driver of valuation and successful successions. Running out of cash is is the #1 reason contractors fail. Improving cash flow improves your Return on Equity. Protect yourself and never let cash flow be the limitation to your profitable growth....

Leadership and Management of Details
Building a great contracting business requires the right balance of leadership and management. While it is possible to separate them the truth is that many of the top leaders are relentlessly disciplined managers.
Changing a Good Decision Making Process Based on Results
Construction projects are complex requiring thousands of decisions made across dozens of teams over many months to ultimately result in a good outcome. As a leader in the construction industry the majority of your value-add is.
Cash Flow Tip 6 - Build Relationships
Build Relationships at All Levels. There isn’t a “Computer” that is negotiating your contract with you, approving your Schedule-of-Values, approving your billing or ensuring timely payment for you. It is the people.